Remember Citigroup

By Simon JohnsonOn Thursday of last week, four senators unveiled the 21^st Century Glass-Steagall Act.  The pushback from people representing the megabanks was immediate but also completely lame – the weakness of their arguments against the proposed legislation is a major reason to think that this reform idea will ultimately prevail.

The strangest argument against the Act is that it would not have prevented the financial crisis of 2007-08.  This completely ignores the central role played by Citigroup.